July 31 Tax Deadline for Landlords

A key tax date is looming that impacts thousands of landlords - and here's an explanation of what's going on and what they need to do to avoid HM Revenue & Customs issuing a fine.

HMRC has already issued a warning that a tax deadline is approaching, but still expects many taxpayers to be caught unawares.

Landlords who need to check if they should take action are those who file a self-assessment tax return each year and make tax payments on account.

The deadline is midnight on July 31 for paying the second payment on account for the 2024-25 tax year.

Missing the deadline will trigger interest charges and payment demands from HMRC, which could add up to penalties of £1,600.

Second tax payment on account due

Sarah Coles, head of personal finance at financial portal Hargreaves Lansdown, said: "The lesser-known self-assessment deadline is almost upon us. For many people, a payment on account is due by July 31 - covering half their expected tax bill for the 2024-25 tax year.

"However, it's such a hectic and expensive time of year that it's no wonder so many people fall foul of the common pitfalls -- and overlook the opportunities.

"If your financial circumstances have recently changed, you may need to pay on account for the first time, and although you will have made the first payment on account in January, you might not have realised there was a second one on the way in July."

Landlords who have overlooked the deadline and do not have money set aside to cover the bill should contact HMRC about setting up a time-to-pay arrangement, which will spread the cost over at least three months. HMRC will add interest at 8.25 per cent, but that's less than a bank or card company is likely to charge.

Payments on account are advance payments towards the 2025-26 tax bill. HMRC assumes taxpayers will earn the same amount and pay the same tax as the previous year, so it takes two advance payments to cover the bill - one on January 31 and the other six months later on July 31.

How tax payments on account work

When the 2025-26 self-assessment return is filed, the payments are credited against the amount of tax due.

If more tax is due, payment is due by midnight on January 31. If the tax is less, a refund is due. Some refunds are automatic. Taxpayers with a P800 calculation flagging a refund should speak to HMRC about claiming the money.

A self-assessment return tax calculation of a statement of account from HMRC will show if a payment is due on July 31 and how much should be paid. The rule-of-thumb is the payment is half of last year's tax bill payable on each deadline day.

Taxpayers must make payments on account unless their last self-assessment tax bill was less than £1,000 or 80 per cent of their tax was deducted through the PAYE system.